Owning a home in Toronto can be a investment given the rapid rise of real estate values over the last decade and a half. However, relying on your home to fund your retirement is not a good idea. Why? Because you will always need a place to live. So, even if you sell your home and make a lot of money – you will still have to buy a smaller home or condo and, given value of the current market, there is no guarantee that you will have any money leftover to fund the kind of retirement you envision.
The better option for funding your retirement is saving a little at a time right from when you start working. Even if you are in your mid-forties or fifties and have yet begun setting aside retirement funds, it’s never too late to start. The best way to evaluate how much you will need for your retirement and how much you should start saving can only be assessed by sitting down and thinking about what you want for your retirement and how you plan to fund it. If you are looking for a low-key life without much travel, then you likely won’t need a whole lot set aside. However, if you would like to travel and have the ability to indulge in what you want, when you want it, then it is best to set aside a sum of money for your future years as soon as you can.
Unless you plan on selling your home and moving to a smaller, less expensive community or smaller condo when you retire, you should not rely on your home as your many mean of income after your end your career. Even if you think of using a reverse mortgage or HELOC to fund your retirement, you should think carefully about the consequences of such financial instruments before turning to them. In many instances those vehicles are meant to benefit the banks instead of the homeowners.
In short, your home should be considered your home. You should not look to it as your retirement security blanket. You will still need money to pay your taxes and utilities, buy your necessities and have some money leftover for travel and entertainment – those are things you can’t do with money from your home.
The better option for funding your retirement is saving a little at a time right from when you start working. Even if you are in your mid-forties or fifties and have yet begun setting aside retirement funds, it’s never too late to start. The best way to evaluate how much you will need for your retirement and how much you should start saving can only be assessed by sitting down and thinking about what you want for your retirement and how you plan to fund it. If you are looking for a low-key life without much travel, then you likely won’t need a whole lot set aside. However, if you would like to travel and have the ability to indulge in what you want, when you want it, then it is best to set aside a sum of money for your future years as soon as you can.
Unless you plan on selling your home and moving to a smaller, less expensive community or smaller condo when you retire, you should not rely on your home as your many mean of income after your end your career. Even if you think of using a reverse mortgage or HELOC to fund your retirement, you should think carefully about the consequences of such financial instruments before turning to them. In many instances those vehicles are meant to benefit the banks instead of the homeowners.
In short, your home should be considered your home. You should not look to it as your retirement security blanket. You will still need money to pay your taxes and utilities, buy your necessities and have some money leftover for travel and entertainment – those are things you can’t do with money from your home.
